Former chancellor Helmut Schmidt, who guided West Germany through economic turbulence and Cold War tensions, has died aged 96.

German weekly Die Zeit, of which Schmidt was a co-publisher, confirmed in a statement that he died at his house in Hamburg on Tuesday afternoon.

Mr Schmidt, a centre-left Social Democrat, led West Germany from 1974 to 1982.

He was elected chancellor in May 1974 after the resignation of fellow Social Democrat Willy Brandt, triggered when a top aide to Mr Brandt was unmasked as an East German agent.

The new leader brought a sometimes abrasive self-confidence and his experience as West Germany's defence, finance and economy ministers to the job, which he took during the economic downturn that followed the 1973 oil crisis.

Mr Schmidt's chancellorship coincided with a tense period in the Cold War, including the Soviet Union's 1979 invasion of Afghanistan.

He went along the following year with the US-led boycott of the Moscow Olympics, although he later said that it "brought nothing".

Amid efforts to ward off a global recession, Mr Schmidt was among the movers behind the first economic summit of leading industrial powers at Rambouillet, France, in 1975, which later turned into the annual Group of Seven meeting.

He and then-French president Valery Giscard d'Estaing also played leading roles organising the European Monetary System, aimed at protecting European currencies from wild fluctuations, which ultimately paved the way for the common European currency, the euro.

Born on December 23 1918 as the son of a half-Jewish school teacher in Hamburg, Mr Schmidt joined the Hitler Youth when his rowing team was included in the Nazi youth organisation, but was suspended at age 17 - "probably because my griping got on their nerves".

Drafted as a soldier during World War II, his unit was deployed in the Soviet Union in 1941. He was sent to the western front at the end of the war and taken as prisoner by British forces in April 1945. He was released that August.

Mr Schmidt later said that, as a young soldier, he had recognised the Nazi regime's lunacy but not its criminal nature at first.

He entered West Germany's parliament in 1953, where he earned the nickname "Schmidt the Lip", a tribute to his sharp-tongued debating skills.

As chancellor, Mr Schmidt's confidence served him well in facing down the home-grown terrorism of the Red Army Faction, which grew out of the leftist student movement in the 1960s.

In a 1977 campaign of violence that became known as the German Autumn, the group murdered West Germany's chief federal prosecutor and the chief executive of Dresdner Bank, among others.

Mr Schmidt stood firm, refusing to release jailed Red Army Faction leaders even after the group kidnapped Hanns-Martin Schleyer, the head of the country's industry federation.

"The state must react with all the necessary toughness," he declared.

While Mr Schleyer was being held in 1977, hijackers commandeered a Lufthansa plane to the Somali capital Mogadishu, to force the release of the Red Army Faction leaders.

Shortly afterwards, three of the terrorist group's leaders killed themselves in prison and Mr Schleyer was found murdered.

Mr Schmidt later said "I was prepared to resign" if the Mogadishu operation had gone wrong.

Although convinced he had taken the right action, he also conceded he felt guilty about Mr Schleyer's death.

Mr Schmidt's chancellorship ended with him being ousted in a parliamentary vote in October 1982, when his party's coalition partner, the pro-business Free Democrats, switched its allegiance to Helmut Kohl's conservative Christian Democrats due to disputes over economic policy and the squabbling within Mr Schmidt's party.

He did not run for chancellor again, citing health concerns.

Mr Schmidt had been fitted with a heart pacemaker and also suffered from a thyroid condition. In August 2002, he underwent an emergency bypass operation after suffering a heart attack. Two years later, he had cataract surgery.

After stepping down as a member of parliament in 1987, Mr Schmidt devoted himself to working as co-publisher of the weekly newspaper Die Zeit.

He continued to weigh in on Germany's political debates, rarely shying away from controversy - which gave him a reputation for plain speaking that won him favourable comparisons with other German politicians.

"To this day, he ranks among the personalities in our nation who can give direction to their own country and are listened to internationally," Hans-Dietrich Genscher, his former foreign minister, wrote on Schmidt's 90th birthday in 2008.

His lasting influence was underlined by the huge success of his 1987 memoir, Menschen Und Machte (People And Powers) - a bestseller for more than a year.

Mr Schmidt never abandoned his politically incorrect habit of chain-smoking. That earned him and his wife, Hannelore - better known as Loki - the honour of being parodied on German television as "Loki and Smoki".

In 2008, Hamburg prosecutors threw out an anti-smoking group's complaint against the couple after they lit up in a theatre, flouting a newly introduced smoking ban.

Mr Schmidt and Loki, the childhood sweetheart he married in 1942, had one daughter, Susanne. Their first child, a son named Helmut Walter, died in 1945 when he was only a few months old. Loki Schmidt died aged 91 in 2010.